Sanchez, a waiter and bartender at Tacolicious, works full time and...

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Brent Sanchez has relied on friends for medical care recently. He sits on his bed in his Tenderloin apartment Wednesday May 14, 2014. Brent Sanchez is a waiter and bartender who works 40 hours a week and still can't afford health insurance in San Francisco, Calif.

(05-14) 18:53 PDT SAN FRANCISCO -- As San Francisco Supervisor David Campos tries yet again to close a loophole in the city's universal health care ordinance that has allowed employers to take back tens of millions of dollars earmarked for workers' heath care, he will point to residents such as Brent Sanchez.

Sanchez, a 38-year-old Tenderloin resident, works more than 40 hours a week bartending and serving food at Tacolicious and Daniel Patterson Group restaurants. The companies he works for - and by extension, the customers he serves - are all paying into a fund that is supposed to help him get medical care when he needs it. But Sanchez said he's never touched that money, because it's never been enough to help him buy full health insurance.

He says that if Campos' proposal becomes law, the changes - combined with the new, more affordable insurance options offered because of federal health care reform - would allow him to buy coverage for the first time. The legislation will have its first hearing Thursday at a Board of Supervisors committee.

"I haven't used a dollar of it, ever - luckily I haven't needed it," Sanchez said. "But I want preventative care, so I hopefully won't have something catastrophic going later, which I can't afford. I need to stay healthy, to keep going strong - this is my profession."

Campos' proposal comes as the city attempts to make its landmark health care law compatible with the new federal law, which requires citizens to have insurance or pay a fine.

The city's law requires employers to either offer health insurance to their workers or pay between $1.63 and $2.44 an hour toward health care. Under current law, employers may choose between giving that money to the city for care or putting it into a health account that the employee can draw from - and that employers can take back if it's not used within two years. Since 2010, employers have taken back tens of millions of dollars from those accounts and repeatedly fought efforts by the left to make the contributions irrevocable.

Create a program

Under the national health care reform law that took effect in January, however, those health accounts can no longer be used to pay for regular medical care or to buy insurance. So Campos is proposing to create a program through the Department of Public Health that would allow the city to pool employer contributions and use the money to help subsidize health care for workers through the state's health care exchange.

By making the health account contributions irrevocable, Campos said, he will remove employers' incentive to put money in those accounts - funds that under new federal law, can only be used for vision or dental care anyway. If employers instead gave the money to the city to help subsidize insurance premiums, he said, Sanchez and an estimated 35,000 additional workers in the city will likely be able to afford true health coverage.

"We think it's high time we close this loophole," he said. "Everyone else in this country is moving in the direction of maximum access to health care, and it's sad that in San Francisco we still have thousands of workers who are unable to get health care, and the loophole is a big reason."

Some call it a tax

Some employers disagree with Campos' reasoning, however. The Golden Gate Restaurant Association, which fought the original ordinance and previous unsuccessful attempts to close the loophole, remains opposed.

Executive Director Gwyneth Borden said making the health account money irrevocable will punish employers and force employees into a "Department of Public Health bureaucracy," even though many of them may not want to or be able to afford health insurance on the exchange.

"If the money isn't going directly to the employee it's a tax," she said. "In theory, we have no problem with pooling this money, but if you are going to do that, it's a tax - let's call it that."

But Paul Kumar, a health policy consultant with close labor ties who was involved in drafting the original Health Care Security Ordinance, said that if the money isn't available to employees to help subsidize insurance, as many as 40 percent of workers may not be able to afford to buy coverage on the state exchange. Closing the loophole is a key component of helping those employees afford coverage, he argued.

"Right now there's a perverse incentive for employers to put the money in a place where not only can employers claw it back, but as matter of law, employees may not use it to defray the costs of buying health insurance," he said. "It matters even more now because people are under a mandate and will face penalties if they don't purchase health insurance."

In 2011, Mayor Ed Lee vetoed Campos' legislation that would have closed the loophole and made health account contributions irrevocable, instead signing legislation that extended the length of time that the money had to remain in the accounts to two years. But Campos said he is hopeful that the mayor and his colleagues on the Board of Supervisors who opposed the loophole closure back then will support him this time around, because that compromise legislation has "not done what people said it would do."

Borden disagreed, saying in a letter to supervisors: "We've only had one reporting cycle since (2011) and have not yet reached 24 months to determine success or failure."

After loophole fix

In 2012, after the loophole fix, employers put $107 million into health accounts and paid out $26.4 million - more than double what they paid out in 2011. But 12 percent of employers paid out nothing from those accounts, and more than half placed restrictions on how the money could be spent, including 35 percent who barred employees from using the money to pay for health care premiums.

For Sanchez, it makes sense that his employer's contributions would help subsidize insurance, since he and other workers will be subject to a penalty under federal law if they don't have full health coverage.

"Consumers are paying for it, and my company is paying for it while I am on the floor," he said. "Then I am not going to see it?"